Tuesday, April 19, 2011

Twitter bribed by payroll tax break to stay by the Bay

In an 8-to-3 vote, the San Francisco Board of Supervisors has decided in support of an ordinance that will give local business Twitter among others a tax break from the city’s corporate payroll tax on brand new hires, states the Los Angeles Times. The 1.5 percent tax shelter will be good for the next six years, so long as corporations like Twitter maintain their physical San Francisco offices. San Francisco Mayor Lee lauded the vote as an economic boon for the city, however critics on the city board see a negative precedent set by such a large city having to stoop to court a business with tax shelters. Article source – City of San Francisco grants Twitter a payroll tax break by MoneyBlogNewz.

It is ‘rejuvenation’ for Twitter to be there

Lee says that keeping Twitter in San Francisco could only have happened with the payroll tax break.

“This moment represents a real step forward in the effort to revitalize and transform the Central Market area,” he said. “Central Market and the Tenderloin have been burdened with high vacancies and blight for decades.”

While Twitter officials would not comment on the payroll tax exclusion Wednesday, Lee told the San Francisco Chronicle that he appreciated Twitter’s enthusiasm for helping revitalize those key business districts. Those areas need some job creation. It would help out San Francisco a lot.

“There is great synergy between Twitter and the arts organizations and small retail businesses who are looking to expand in the area," said Lee. "The city can work collaboratively with businesses, community-based organizations, property owners and area residents to catalyze meaningful change.”

Tax holiday may not be such a fantastic thing

The Chronicle states that the tax break can be saving Twitter a lot of money. About $22 million can be saved in taxes in just six years. The $22 million isn't something every person is thrilled about. City supervisor John Avalos explained that San Francisco really needs the money.

“I don’t believe giving an exception to our payroll tax is the way to go,” he said. “I believe that businesses in San Francisco and around the country should be socially responsible. … If we allow a company to threaten to leave, then give them a tax break so they don’t, we’re setting a bad precedent."